Save Our Steel in the News

Bethlehem Works plans not set in steel

Developers have met with many people to get feedback.

By Chuck Ayers Of The Morning Call

Michael Perrucci knew about Bethlehem from his undergraduate days at Moravian College and watched with great interest as Bethlehem Steel wended its way through bankruptcy, eventually being bought by International Steel Group of Cleveland.

Perrucci and his partner, attorney Richard Fischbein, knew the bankruptcy sale involved a 1,600-acre parcel on the South Side envisioned for an industrial and business park. The two men saw a lucrative opportunity in redeveloping the massive steelmaking complex.

Perhaps most important, Fischbein knew Wilbur Ross, the financier behind International Steel Group — they're neighbors in the Hamptons on Long Island, some of the priciest real estate on the East Coast.

With that entree, Fischbein and Perrucci decided to talk to Ross about buying the land in south Bethlehem.

Perrucci and Fischbein failed to get the 1,600-acre tract of former Bethlehem Steel land when Lehigh Valley Industrial Park Inc. signed an agreement of sale for the land in January. Instead, the attorneys in April signed a deal to buy the ''Bethlehem Works'' tract, an adjacent 120 acres that Bethlehem leaders see as key in revitalizing the South Side business district.

''The whole thing started over lunch in New York,'' Perrucci said.

Perrucci and Fischbein say they want to complete Bethlehem Steel's vision of redeveloping the land into a huge tourist attraction anchored by a world-class industrial museum.

And the two men, who have brokered big developments before, have the connections to pull it off, local officials believe.

''They're heavy hitters,'' Bethlehem Mayor John Callahan said. ''They have the resources to bring to bear to get the project completed.''

Fischbein is a partner in a Manhattan firm that counts Donald Trump and the estate of slain rapper Tupac Shakur among its clients. Perrucci, a Phillipsburg attorney, played a major role in the campaigns of two prominent New Jersey Democrats, former Gov. James Florio and former U.S. Sen. Robert Torricelli.

Fischbein and Ross also have a working relationship going back to the mid-1990s when they both had a hand in redeveloping Fulton Landing, which turned mostly vacant buildings between the Brooklyn and Manhattan bridges into luxury apartments, restaurants and stores — much like what is envisioned in Bethlehem.

After Perrucci and Fischbein missed the opportunity to buy the 1,600-acre tract from International Steel Group, they figured they were out of luck.

At the time, Delaware Valley Real Estate Investment Fund had the inside track on the 120-acre Bethlehem Works land, mostly west of the Minsi Trail Bridge. But when Delaware Valley backed out of the deal April 7, it opened the door for Perrucci and Fischbein.

''That prompted some telephone calls to Wilbur ,'' Perrucci said.

By April 23, the two attorneys had a sales agreement with Ross' company for the Bethlehem Works land.

Well connected

Fischbein's firm raises hundreds of thousands of dollars in political contributions annually.

In 1998, his firm was a major contributor to former New York Attorney General Betsy McCaughey Ross in her failed bid for the Democratic nomination for governor — her husband at the time was Wilbur Ross.

One of the quirkier stories from the year was about a dinner of Fischbein's at a fancy New York restaurant. He was so dissatisfied with a meal he hosted for 17 paralegals that he refused to pay the automatic 18 percent tip that had been added to his $2,481 bill.

The restaurant called police, and Fischbein subsequently sued the restaurant for $7 million. He settled for a $10,000 donation from the restaurant to the Children's Aid Society and kicked in $10,000 himself.

But only a few leaders in the Lehigh Valley knew Perrucci or Fischbein when word of the sale agreement became public in Bethlehem, or what the two — who named their company BethWorks Now — planned for the land.

State Sen. Lisa Boscola, D-Northampton, went so far as to ask Gov. Ed Rendell to intervene in the sale to make way for an offer by local developers Abe Atiyeh of Allentown and Kris Kapoor of Bethlehem.

Perrucci and Fischbein know the Bethlehem Works land is likely to receive millions of dollars from the state to remediate the idle Steel land, giving it good chance to succeed. They just don't know how much of the $450 million Bethlehem Works vision will remain or what form the mix of stores, recreation and residences will take. Since signing the agreement, Perrucci and Fischbein have talked with elected officials and historical preservation and community groups.

''I've tried to meet with all the people who have expressed an interest in the property,'' Perrucci said. ''We've picked up some very interesting points.''

That has allayed fears expressed by some who said Bethlehem Works was being sold to developers whose plans were a mystery and might include ''big-box'' development.

Laying groundwork

Fischbein and Perrucci have talked with Boscola, Callahan, City Council President Michael Schweder, Councilman Robert Donchez, Bethlehem's Community and Economic Development Director Tony Hanna and historical groups that want to preserve the blast furnaces.

State Rep. T.J. Rooney, a Democrat whose 133rd District includes the Bethlehem Works land, was one of the community leaders who already knew Perrucci, a longtime contributor and friend.

''They have gone to great lengths to engender and solicit the input from those people and entities in the community that have expressed an opinion or shared a vision for that property,'' Rooney said. ''They've gone about this in the most professional and proficient manner to incorporate the interests of the community, and for that they should be commended.''

Boscola's view has softened since meeting with Perrucci, but she hasn't committed to anything.

''We agreed this wasn't going to be the last meeting,'' Boscola said.

The developers also have met with ArtsQuest Executive Director Jeff Parks to discuss his plans for an arts park at Bethlehem Works that would serve as the home to Musikfest.

Parks was cautious in his evaluation of the meeting and how his plans might dovetail with BethWorks Now.

''I'm reluctant to characterize anything at this point,'' he said. ''I want to respect Mr. Perrucci's transition here, his process, which I think is a very proper process.''

Fischbein and Perrucci also met with Stephen Donches, president of the National Museum of Industrial History, which is incorporated into the Bethlehem Works plan.

Donches summarized the meeting succinctly.

''They listened,'' he said.

Fitting in

They have also agreed to use union labor to build Bethlehem Works, preserve the furnace stacks as an attraction and participate in a formal ''visioning'' workshop to craft an update to the 8-year-old plan first laid out by Bethlehem Steel.

''We have a master plan that was put together eight years ago by a company that no longer exists,'' Callahan said. ''Part of that master plan was predicated on Bethlehem Steel providing guidance and resources to it.''

Because Bethlehem Steel no longer exists, some elements of the plan that would have otherwise been supported by Steel have become economically challenging, but Fischbein and Perrucci appear willing to bend.

''They seem to be very flexible and open-minded to the prospects there,'' Callahan.

Fischbein said the developers are coming to the project with few preconceived ideas.

''Anybody who would say to you what is going to happen there is lying,'' Fischbein said. ''This is not a down-and-dirty project where you clear a field and put up 200 houses.''

Making the project palatable to the community is one of the group's highest goals, he said.

''This is about doing what will work for the community and work commercially,'' Fischbein said. ''This is very, very real, and it should be done in a way that's right. You have to think 50 years out. You can't just create things that won't survive.''

Their flexibility, however, is tempered by an economic reality — it must make money.

''At the end of the day, the project needs to make economic sense, otherwise none of the projects will be successful,'' Perrucci said.